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PHH Moves Forward With Updated Servicing Standards

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In a statement released Wednesday, PHH said they will implement new servicing standards as part of a settlement with a multi-state group of state attorneys general, as well as following a “testing and reporting process to ensure compliance with the Servicing Standards for a period of three years.”

The $45 million settlement was reached between PHH and the Multi-State Mortgage Committee, a group consisting of state attorneys general from every state except New Hampshire, as well as mortgage regulators from 45 different states.

PHH’s statement read that they “ … have agreed to resolve concerns raised by the MMC arising from its servicing examination conducted in 2010 and believe that settling this matter is in the best interest of PHH and its constituents. Our decision to resolve this legacy matter under the terms of the settlement agreement and consent orders is not an admission of liability or that we violated any applicable laws, regulations or rules governing the conduct and operation of our Servicing business during the relevant time frame.”

PHH also said that, while they would adhere to the mandated servicing standards, but that they largely already line up with PHH’s own current internal servicing standards. “We have made and will continue to make the necessary enhancements in our operations to ensure we remain compliant and continue to serve our customers in a fair and appropriate manner.”

In a Wednesday press release, New York Attorney General Eric T. Schneiderman said, “The foreclosure crisis continues to devastate communities across New York. We have zero tolerance for the types of practices that helped create the crisis—and will hold mortgage companies to account.”

The complaint by the attorneys general states that, during the period between January 1, 2009, and December 31, 2012, PHH “threatened foreclosure and conveyed conflicting messages to certain borrowers engaged in loss mitigation.” PHH is also accused of charging unauthorized fees for their services. The settlement does not address any conduct occurring in 2013 or later.

Of the $45 million settlement, $30.4 million will go to affected borrowers, $8.8 million will go to state mortgage regulators, $5 million will go to states that took lead on investigating and working out the settlement, and $1 million will go toward claims administration.

Borrowers who lost their homes due to foreclosure during the indicated time period will be eligible for a minimum payment of $840. Those who were foreclosed upon, but did not lose their home, will receive a minimum payment of $285.

About Author: David Wharton

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